Texas Insurance Commissioner Sullivan Should Require Refunds of Excessive Auto Insurance Premiums

Washington, D.C. – The Consumer Federation of America (CFA) called on Texas Insurance Commissioner Kent Sullivan to require auto insurance companies to give premium refunds to consumers throughout the summer, due to rising COVID-19 cases in Texas, the recent re-closures of businesses, and the likely delay in school openings.

“The recent surge in COVID-19 cases, hospitalizations, and deaths, combined with reclosures of businesses and widespread concern about the pandemic, will cause vehicle miles traveled and crashes to decline again,” CFA wrote in a letter sent to the Commissioner.  “Therefore, the conditions that led to auto insurance companies providing voluntary refunds and credits in the spring persist and will continue for the foreseeable future.”

CFA urged the Commissioner to “ensure that insurance rates are not excessive and consumers are not being overcharged for coverage at this time of dramatically reduced exposure to risk of loss.”

In recent weeks Texas authorities have taken a number of steps to combat the COVID-19 pandemic and encourage people to stay at home. In late June Governor Greg Abbott reclosed bars, limited restaurants to 50% capacity, and restricted the size of outdoor gatherings. On July 20, Hidalgo County issued an emergency shelter at home order urging people to remain at home and for commercial businesses to cease their operations unless they are essential or can provide takeout or delivery services. Houston has delayed the start of schools and will be online only for the first six weeks, and public schools statewide can delay the start of in-person learning by up to eight weeks.

Earlier this spring the consumer groups Texas Appleseed, Texas Watch, and TexPIRG highlighted the concern that insurer premium relief during the spring was inadequate for consumers, and called for greater refunds for consumers. Now, CFA noted, most companies are not giving any refunds or credits to consumers even though the premiums they are paying are based on pre-pandemic projections about accidents that are no longer valid.

“Unfortunately, many insurance companies seem to think they did enough when they gave back a portion of the excess premium they collected this spring,” said CFA’s insurance expert Doug Heller. “But this pandemic persists in Texas and much of the country. The same reasons that made refunds necessary in the spring continue into the summer, so drivers need Commissioner Sullivan and his colleagues around the country to demand that insurers provide appropriate relief.”

Contact: Doug Heller, 310-480-4170